AUSTIN – The Texas Public Policy Foundation’s Economist Dr. Vance Ginn in the Center for Fiscal Policy, and Economist Dr. Travis Roach in the Department of Economics at the University of Central Oklahoma, co-authored the peer-reviewed academic article “An Oil-Producing State’s Ability to Cope after a Regional Free Trade Agreement—The Case of Texas and NAFTA” published in The International Trade Journal. The study examines the potential economic effects of the 1994 North American Free Trade Agreement (NAFTA) on the state of Texas. Their results suggest that that NAFTA helped Texas’ economy be more resilient to oil price fluctuations and other U.S. economic disruptions.
“International trade has been one of the greatest harbingers of prosperity worldwide,” says Ginn. “Though usually discussed at the national level, individual states also benefit. My recent peer-reviewed publication co-authored with Dr. Travis Roach finds that the Texas economy was more resilient to oil price fluctuations and economic volatility nationwide after the 1994 North American Free Trade Agreement (NAFTA). Lower trade costs led to industrial diversification to meet the desires of Mexico and Canada contributing to Texas now leading the U.S. in exports for the last 13 consecutive years supporting millions of jobs in small to large firms.
“While there are potential costs associated with joining a regional free trade agreement, our results suggest that the benefits of NAFTA outweigh those costs in Texas, helping the state better cope with external shocks. Our research helps explain why Texas’ economy has weathered the substantial drop in oil prices relatively well since July 2014.
“This research should assist policymakers at the federal and state level when deciding whether to support free trade agreements and free trade more broadly. Ultimately, allowing freer markets to allocate resources with fewer international trade restrictions and pro-growth public policies that have been successful in Texas should be a model for other states and nations.”
The article can be read in its entirety here: http://goo.gl/r5sFNk
To schedule an interview with Dr. Ginn, please contact Caroline Espinosa at [email protected] or 512-472-2700.
Vance Ginn, Ph.D., is an Economist in the Center for Fiscal Policy at the Texas Public Policy Foundation.
The Texas Public Policy Foundation is a non-profit, free-market research institute based in Austin, Texas.